January 2011 Play

09/01/2011 11:02

Weakness in overall Market.  Distribution day is gathering momentum.  Market leaders show a sign of weakness.  Under this scenario, you have to play for "Short Sell" strategy.

Theme: when a stock suffers a violent down day, the low will act as a resistance level as worried market participants begin to sell on any bounces back into the sell off day's price range.

Play the stock which has breached its 50 or 100 or 200 days moving average with large volume.  Your stop loss will be 1% higher of the high of violent down day.  Your selling point will be in the price range of sell off day, where your 6th sense says that this is right price in respect of risk & reward.